This article was initially written by Abba.Garba and Derik.Lu
Introduction
In the dynamic and constantly evolving realm of blockchain and cryptocurrency, the pursuit of innovation and collaboration have emerged as fundamental prerequisites for advancing transformative technologies. In line with this ethos, Arkreen, a prominent figure in Decentralized Physical Infrastructure Networks (DePIN) and Regenerative Finance (ReFi), has embarked on an exciting and groundbreaking partnership with the Celo Foundation, stewards of the carbon-negative, mobile-first Celo blockchain renowned for its unwavering commitment to promoting carbon neutrality applications throughout the ReFi ecosystem.
This collaboration establishes the pioneering Arkreen Renewable Energy Certificate (AREC) bridge protocol within Celo’s sustainable blockchain ecosystem. AREC bridge serves as a powerful link and tool, converting conventional renewable energy certificate (REC) assets from the physical world to the crypto carbon assets in the Web3 domain. Arkreen’s participation in Celo’s on-chain offset program advances the adoption of data-driven, on-chain tokenized REC assets within the Celo community, empowering the climate actions to achieve carbon neutrality.
This collaboration transcends a mere alignment of industry leaders; it represents a synergistic force ready to catalyze a paradigm shift toward sustainable practices, aiming to achieve net-zero carbon emissions through the utilization of Web3 technologies. Not only will it facilitate the integration of Arkreen as a vital member of the Celo Climate Collective, but it will also reinforce Celo’s leading role in the Regenerative Finance (ReFi) movement. This partnership significantly contributes to Celo’s mission as a carbon-negative blockchain, establishing it as a transformative pathway to prosperity for all.
This article delves into the background of this strategic partnership between Arkreen Network and Celo Network.
What is Arkreen?
Arkreen Network is a Web3-powered digital infrastructure for globally distributed renewable energy resources, facilitating their connection and monetization to support carbon reduction applications.
Arkreen Network enables renewable energy generators to declare the amount of electricity they produce. In return, the network rewards these suppliers for their contributions. Based on credible data from Arkreen Network, a lot of decentralized renewable energy applications and services come alive.
One example is the AREC (Arkreen Renewable Energy Certificate) Dapp, which supports issuing self-certified REC assets in the form of AREC NFTs and ART tokens. AREC bridge, the key point of this partnership, is another application which has the capability to bridge traditional REC assets to tokenized crypto REC assets in the Web3 world.
What is Celo Network?
Celo Network is a carbon-negative, emerging Ethereum layer-2 blockchain with a rich ecosystem of global partners building innovative Web3 applications. Celo is designed to make financial tools and services more accessible to people around the world, particularly those who are underserved or excluded from the traditional financial system. Celo Climate Collective Treasury has supported broad projects utilizing web3 technology to combat climate change and become the home of the climate collective and ReFi ecosystem.
AREC Bridge Protocol Introduction
AREC bridge protocol is the methodology converting conventional REC assets to tokenized REC assets, which is called AREC, Arkreen Renewable Energy Certificate. AREC is minted under the strict conservation of redeemed conventional REC assets. It stands as a unique type of Renewable Energy Certificate (REC) that is specifically granted upon incontrovertible proof of renewable energy production originating from conventional REC assets (i.e., I-REC). This unique capability, known as the AREC bridge feature, enables the seamless integration of traditional RECs from the physical world into the innovative Web3 ecosystem.
At its core, the AREC Bridge Protocol serves as a bridge connecting conventional REC with tokenized REC assets residing on the Celo Network. It effectively acts as a catalyst for change, breaking down the traditional barriers that have historically impeded the massive adoption of REC as a measure to community individual for their voluntary climate actions.
The primary purpose of the AREC Bridge Protocol is to facilitate tokenizing conventional REC assets with utmost ease on the Celo Network and highly increase the liquidity of the AREC assets for the Celo community. In doing so, AREC assets can be seamlessly transferred and exchanged as either fungible or nonfungible tokens within open, permissionless, and highly efficient markets, substantially enhancing the liquidity of these novel REC assets. Moreover, AREC asset liquidity and accessibility can be consolidated through DEXes, such as Uniswap, offering versatile readiness for achieving carbon neutrality.
Below is a simple process on how to bridge REC assets and offset carbon emissions with AREC assets over the Celo/AREC bridge protocol.
- Redeem one batch of RECs, and acquire the redemption statement file.
- Mint an AREC NFT with the exact same amount of renewable energy recorded in the redemption statement file.
- Liquidate the AREC NFT to mint ART tokens and provide these ART tokens as liquidity in DEX and/or AREC Bank service.
- Purchase and offset a certain amount of ART tokens to neutralize carbon footprint on behalf of an entity.
In a world where environmental action is of paramount importance, the AREC Bridge aspires to become an instrumental force, incentivizing the adoption of renewable energy sources and playing a pivotal role in driving and accelerating the global effort to mitigate climate change.
Celo Network Requires REC Bridge Mechanism
Carbon credits and renewable energy certificates (RECs) constitute the two primary categories of carbon assets. Carbon credits are tradable certificates that confer the right to emit one ton (1000kg) of CO2, while RECs serve as documented evidence that the energy used originates from renewable sources with low or zero carbon emissions, as opposed to fossil fuels. Both carbon credits and RECs play critical roles in aiding individuals and organizations in their efforts to reduce carbon emissions and promote sustainability.
Celo has already introduced carbon credits into its ecosystem through CGP30/CGP52/CGP77/CGP80. Now is the right time to onboard REC assets, as AREC Bridge has successfully paved the way from conventional REC assets to tokenized AREC assets. The Celo community deserves an alternative avenue for offsetting carbon emissions and contributing to climate mitigation efforts.
The challenge is that the issuance of REC assets is typically limited to large-scale renewable power grids, and RECs are only used by large electricity consumers to offset their carbon emissions, while individuals and small businesses often face challenges in participating in REC generation, consumption, and transitioning to greener electricity usage.
Through the AREC Bridge, conventional REC assets seamlessly transition into the Web3 world as crypto REC assets, eliminating the barriers and friction mentioned above. All participants in the Web3 domain now have the potential to contribute to the demand for REC assets, significantly expanding the market. Numerous blockchain projects, particularly those using Proof of Work (POW) consensus mechanisms, represent untapped reservoirs of demand for crypto REC assets.
Even more, every individual and family can become a viable force in mitigating climate change by integrating carbon neutrality into their daily lives. The responsibility for addressing global warming extends beyond government agencies and corporate giants; it is a shared mission for every individual, family, and entity.
Upon the completion of this collaboration, the Celo blockchain will host the world’s first REC bridge application, capable of seamlessly bridging numerous REC assets from the physical world into the crypto Web3 space. Many ReFi and ESG-related projects within the Celo ecosystem will have the opportunity to utilize tokenized REC to meet their diverse decarbonization and investment requirements.
AREC Bridge Protocol Importance for Celo Network
AREC’s strategic importance for Celo lies in its potential to serve as a groundbreaking REC tokenization bridge protocol, diversify carbon asset sources for on-chain offsetting, and promote standardized, data-based REC practices within the Web3 ecosystem. These contributions not only enhance Celo’s sustainability credentials but also position it as a leader in leveraging blockchain technology for environmental and social impact, attracting more users and projects that prioritize sustainability and green initiatives.
AREC plays a strategic role in the Celo ecosystem for several key reasons:
1. Tokenization Bridge Protocol:
The fundamental purpose of the AREC bridged protocol is to tokenize the conventional REC assets on the Celo blockchain. It opens up opportunities for more Celo ecosystem applications to leverage and benefit from AREC tokens. By facilitating REC tokenization, the AREC Bridge can enable projects within the Celo ecosystem to easily offset the project carbon emission, fostering sustainability and promoting green initiatives.
2. Diversifying Carbon Asset Sources:
AREC can contribute a new type of carbon asset to Celo’s on-chain offset mechanism. This diversification of carbon asset sources is vital for maintaining a robust and adaptable carbon offset infrastructure. By introducing a new type of carbon asset through AREC, Celo can broaden its ability to offset carbon emissions effectively and cater to a more extensive range of use cases, ensuring a more sustainable and versatile ecosystem.
3. Promoting Data-Based and On-Chain Tokenized/Offest REC Standards:
AREC’s focus on creating an on-chain tokenized REC standard aligns with the broader goals of the Web3 ecosystem. This initiative not only achieves transparency, interoperability, and credibility through the blockchain system and decentralized storage network but also fosters a unified approach to handling renewable energy data. Such standardization holds the potential to contribute significantly to the development of a more sustainable and efficient global energy infrastructure.
Closing Thought
In conclusion, the partnership between Arkreen and Celo is positioned to reshape the Celo network landscape through the introduction of the AREC Bridge Protocol. Leveraging the robust foundation of Celo’s established infrastructure and the unwavering support to a thriving community, this synergy forms the backbone for a revolutionary mechanism that facilitates the tokenization of conventional REC assets.
With the help of Web3 technology, longstanding barriers that have hindered the widespread adoption and consumption of REC assets are dismantled, and a broader spectrum of participants, including individuals and businesses, are engaged in carbon offsetting and environmental sustainability. The AREC Bridge Protocol, with its multifaceted benefits and innovative approach, stands as a catalyst for positive change within the Celo network and the broader landscape of ESG responsibility.
Check out the AREC Document article for more information
https://docs.arkreen.com/arec/arec-overview/
